The United States and Japan will step up their defence cooperation to deal with the threat from nuclear-armed North Korea as tensions in East Asia remain high, officials from the two allies said on Thursday.

PM avoids action on penalty rates

Tony Abbott has passed the buck on the issue of penalty rates to employers, workers and the industrial umpire.

Responding to a Productivity Commission recommendation that would abolish Sunday penalty rates in the retail and hospitality sectors and make them the same as Saturday, the prime minister pointed the finger at previous Labor governments.

"It's almost as if they wanted to restore the church Sunday by closing the shops," Mr Abbott told Radio 3AW on Thursday of Labor moves to increase penalty rates.

When asked whether the government would implement the commission's recommendation, he said "these things should be considered by the Fair Work Commission" in responding to submissions from employers and unions.

Mr Abbott also played down a warning from business leader Don Argus, who has urged the coalition and Labor to back down from their ideological positions on workplace relations to avoid Australia "finishing up like Greece".